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Is Cummins Inc. (CMI) a Good Stock to Buy?

As industrywide interest jumped, some big names have been driving this bullishness. Lodge Hill Capital initiated the largest call position in Cummins Inc. (NYSE:CMI). Lodge Hill Capital had $44.9 million invested in the company at the end of the quarter and also created a $32 million long position in the stock during the quarter. The other funds with brand new CMI positions are Matthew Tewksbury’s Stevens Capital Management, and Louis Navellier’s Navellier & Associates.

Let’s check out hedge fund activity in other stocks similar to Cummins Inc. (NYSE:CMI). We will take a look at TELUS Corporation (USA) (NYSE:TU), Hess Corp. (NYSE:HES), EnergySolutions, Inc. (NYSE:ES), and Devon Energy Corp (NYSE:DVN). All of these stocks’ market caps match CMI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TU 9 224564 -3
HES 37 1580730 0
ES 20 329160 4
DVN 50 1340988 -11

As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $869 million. That figure was $510 million in CMI’s case. Devon Energy Corp (NYSE:DVN) is the most popular stock in this table. On the other hand TELUS Corporation (USA) (NYSE:TU) is the least popular one with only 9 bullish hedge fund positions. Cummins Inc. (NYSE:CMI) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard DVN might be a better candidate to consider a long position.

Disclosure: None

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